Rising rents and reduced living allowances are driving expatriate workers out of their preferred neighbourhoods as their leases come up for renewal, estate agents say. John, an expatriate from Britain, has rented an apartment in Wan Chai for nearly a year. It is close to his office and offers all the convenience of city living. However, he is now reluctantly searching for a cheaper apartment elsewhere. "I'm paying a lot more here than I want to pay. I have lived in Europe and the Middle East before, and renting in Hong Kong is by far the worst. You pay more and get less for flats that are of a low quality," he said. He is now looking for a flat in Kennedy Town and hoping to pay less than HK$10,000 a month. John's experience is typical of a growing number of expatriate workers in the city, who are relocating to outlying districts because of increasing rents, property agents said. Research by Global Property Guide, a United States online property research website, shows Hong Kong is the sixth most expensive city in the world for renting a 1,288 sq ft flat. Housing allowances paid by employers have also fallen. Another agent who focuses on the expatriate market and asked to remain anonymous said many companies cut allowances for their expatriate employees after the global financial crisis in 2008. "Most of my clients' rental allowances had fallen from HK$30,000 a month to HK$20,000 a month," he said. Patrick Chow Moon-kit, head of research at Ricacorp Properties, said: "Tenants who have to renew their lease this year face a 20 to 30 per cent rise in rents." But while rents in central districts will rise, rents in the New Territories could fall 10 per cent because 5,000 new flats will be completed in the area this year. "An increasing number of expatriates are relocating to previously unpopular areas. Expatriates who were living at Bel-Air in Cyberport have moved to The Belcher's in Sai Wan and Wan Chai's J Residence and The Zenith, and expatriates from Japan and Korea who used to live in Quarry Bay's Taikoo Shing have moved to Tseung Kwan O," Chow said. Local agent Janice Chan, who focuses on the Hong Kong Island expatriate market, said many owners were increasing rents by HK$1,000 to HK$2,000 a month. "Rents will continue to rise since there is no increase in supply in the pipeline. Fewer investors have bought flats for leasing since the government introduced extra stamp duties in February last year," she said. Another agent who focuses on the expatriate market - and asked to remain anonymous - forecasts a steady increase in central rents. "It used to be popular to buy flats for leasing but since investors were required to pay extra stamp duties we have fewer flats available for leasing," he said. "At the same time demand for renting is increasing because it is difficult for end users to buy flats under the cooling measures." Given the demand from expatriates, choice was also limited, said Ricacorp's Chow, who suggested expatriates consider flats at The Merton in Kennedy Town. "The estate provides one-bedroomed flats at asking rents of HK$15,000 a month," he said.